The single currency fell to 1.0144 dollars, after having already recorded the day before a low of 19 years. Around 8:40 p.m., it remained close to this level, at 1.0158 dollars.
The euro fell Thursday to a level not seen since December 2002, stuck by the conjunction of an energy crisis, galloping inflation and an economic slowdown in progress, a headache for the European Central Bank (ECB ).
The single currency fell to 1.0144 dollars, after having already recorded the day before a low of 19 years. Around 6:40 p.m. GMT, it remained close to this level, at 1.0158 dollars.
The euro also slid to its lowest price in more than seven years against the franc and the Canadian dollar.
“There are very few reasons to buy euros right now,” commented Juan Manuel Herrera of Scotiabank. Conversely, headwinds are building up against the common currency of 19 European countries, with tensions over energy supply currently having the upper hand.
“There is a lot of uncertainty”, explains the analyst, in particular “about whether or not Russia will suspend its gas deliveries to Europe”. Such a scenario “would mean that the euro zone would face rationing in the second half of the year”, which would further aggravate the already fragile state of the economy.
“Can the ECB (European Central Bank) hike rates to contain inflation, while keeping bond yields low and preventing a downturn in the economy? It is a difficult task and it seems that the market does not believe it capable of it”, argued Christopher Vecchio, of DailyFX.
“At current levels, so close to the psychological threshold of parity, the course will be driven primarily by its momentum, mood and news,” anticipated, in a note, Boris Kovacevic of Western Union.
For him, the single currency could switch under the dollar if the equity markets started to fall again, if gas supplies to Europe were reduced further or if traders began to believe in a less aggressive ECB.
The tumble of the euro and the extraordinary volatility of the markets are accentuated by a lack of liquidity, which amplifies price variations.
Added to this is the strong demand for the dollar in this context of generalized uncertainty, as well as a wave of speculation against the main European currency.
Also battered in recent days, the pound sterling offered itself a respite on Thursday, after the announcement of the resignation of Prime Minister Boris Johnson, after a long political crisis.
Even if the departure of the leader of the British Conservative Party can help stabilize the political landscape, the United Kingdom “still has to deal with inflation and growth problems”, tempered Christopher Vecchio.
In addition, the analyst points out, currency traders expect the Bank of England to be a little less aggressive in its monetary tightening than other central banks, primarily the US Federal Reserve (Fed), which which puts the pound at a disadvantage, for fear of causing a recession.